Yesterday the United States Senate Committee of Banking, Housing and Urban Affairs conducted a hearing on the implementation of the Biggert-Waters Flood Insurance Reform Act of 2012.
This hearing did not directly affect legislation but was simply a means of getting the message out and educating members of congress and people throughout the country regarding the pending disaster resulting from astronomical flood insurance rate increases.
The hearing commenced at 2:30 pm.
The hearing commenced at 2:30 pm.
The hearing commenced with statements by the Committee Chair, Senator Jeff Merkley from Oregon, Committee Vice-Chair Dean Heller from Nevada, Senator Jon Tester from Montana, and Senator Elizabeth Warren from Massachusetts.
Collectively the opening statements from the above Senate Committee members outlined the myriad challenges faced by constituents with the pending implementation of the Biggert-Waters Act and those problems faced by FEMA and the NFIP.
Collectively the opening statements from the above Senate Committee members outlined the myriad challenges faced by constituents with the pending implementation of the Biggert-Waters Act and those problems faced by FEMA and the NFIP.
"a manyfold increase in insurance rates..."
"inability to sell or buy a home..."
"forced place insurance...."
"the solvency of the NFIP..."
Of particular note was a statement by Senator Heller...."Flood insurance is a critical safety net for coastal communities."
Senator Tester followed up by stating that "Hopefully we can do something to get NFIP back in the black...but we want something that does not break the back of homeowners."
Upon conclusion of the Committee's opening statements, the first panel (#1) of witnesses, consisting of Senators Mary Landrieu and David Vitter, both of Louisiana, were asked to give their prepared statements.
Senator Vitter stated that back in 2012 when the Biggert-Waters Act was being compiled that it was "explained to us that insurance rates would increase because of this bill but the huge rate increases we are now hearing about from FEMA and the NFIP are from a different planet!"
Senator Vitter also explained that Biggert-Waters and its higher insurance costs is not an issue solely germane to his home state of Louisiana...."This is not a parochial Louisiana issue - This is a movie coming to a theater near you real soon and it does not have a happy ending!"
Senator Landrieu stated that the Biggert-Waters Act was a piece of legislation that was "premature and not well thought out.." and needs to be radically delayed and fixed. Senator Landrieu expressed her frustration with the fact that the affordability study of Biggert-Waters, which was mandated to be completed in April of 2013, is still not completed. Senator Landrieu concluded her statement by urging both Congress and FEMA...."Forget about fixing blame, let's fix this...we made a mistake."
The second witness panel, consisting of William Craig Fulgate, FEMA Administrator was then allowed to read his prepared statement to the Committee. His statement is contained in the pdf viewer below.
William Craig Fulgate, FEMA Administrator
Upon the conclusion of FEMA Administrator Fugate's statement, he was questioned by various members of the Senate Committee, some of which are outlined below.
Question: What can FEMA do to delay implementation of certain aspects of the Biggert-Waters Act at least until the mandated affordability study is completed?
Answer by Admin. Fugate: I have read this act many times as have my staff and my attorneys. Our consensus is that the law provides FEMA no leeway for enacting a delay of this legislation.
Question: If the act provides no means for a delay, why is the affordability study mandated by the same act to be completed this past April now not expected to be done until 2015?
Answer by Admin. Fugate: FEMA contacted the National Academy of Science to ascertain how we would obtain this affordability study and they stated that law provided insufficient funds, data and time to accomplish this mandate.
Question: We are somewhat confused, you state that the Biggert-Waters Law allows FEMA no leeway to delay rate increases until the affordability study is completed and yet, at the same time, the affordability study which is also required by the same law, has been delayed?
Answer by Admin. Fugate: FEMA does not have the funds or the data necessary to complete this study at this time. Gentlemen we need help in addressing these issues.
Senator Charles Schumer of New York remarked to Administrator Fugate that he is very concerned that the inordinately high rate increases of Biggert-Waters are going into effect without benefit of the affordability study being completed. Instead of getting behind the nascent growth of our housing market now we want to pull the rug out from under it?
Senator Bob Menendez of New Jersey stated to Administrator Fugate that he does not think we should discontinue subsidies while raising rates until the affordability study is completed. Additionally FEMA's flood maps in New Jersey were 80% inaccurate.
[[Note: To view the questions and statements of and to Administrator Fugate in their entirety go to the 53:10 time mark on the archived video of this hearing here.]
With the conclusion of Administrator Fugate's statement and testimony before the Committee the third panel of witnesses were called conisting of:
Ms. Alicia P. Cackley [view testimony]
- Director, Financial Markets and Community Investment
- U.S. Government Accountability Office
Ms. Christine Shirley [view testimony]
- National Flood Insurance Program Coordinator, Planning Services Division
- Oregon Department of Land Conservation and Development
Mr. Stephen Ellis [view testimony]
- Vice President
- Taxpayers for Common Sense
Mr. Birny Birnbaum [view testimony]
- Executive Director
- Center for Economic Justice
After all of the above statements were read into the record, a period of time was spent by committee members each of the above witnesses.
Of particular note was a statement by Ms. Alicia Cackley that the GAO was completing a report that will recommend that flood insusrance be returned to the private sector. This report will be completed by the end of this year.
Additionally, Mr. Stephen Ellis stated that he "applauds the Biggert-Waters law as it eliminates wasteful subsidies and the law should be enacted immediately."
[Note: To view the questioning of the above witnesses its entirety go to the 2:51:04 time mark on the archived video of this hearing here.]
The hearing was adjourned at 4: 40 pm.
[Note: To view the questioning of the above witnesses its entirety go to the 2:51:04 time mark on the archived video of this hearing here.]
The hearing was adjourned at 4: 40 pm.
No comments:
Post a Comment